AMIA, AMDA and INA Address Automotive Performance in July

The industry starts to recover faster than expected. AMIA, AMDA and INA admit that the industry performed better than what was forecasted, largely due to the recovery seen in US demand for vehicles and auto parts. In terms of production, there was a positive year-on-year increase of 0.7 percent in July. Sales saw a year-on-year negative 31.3 percent in that same month. 

Production and Exports

“We are returning to production levels seen before the pandemic,” said Fausto Cuevas, Director General of AMIA, during a press conference. “Results are better than expected. In July 2020, 294,946 units were manufactured, 0.7 percent more vehicles compared to the previous year. Regarding accumulated figures, between January and July, production levels were 35.5 percent below the same period in 2019. July 2020 exports decreased by 5.5 percent compared to July 2019 and accumulated exports fell 36.8 percent compared to 2019,” he said

In terms of export destinations, data confirmed the strong trade relationship with US and Canada as they represented 88 percent of Mexico's vehicle exports, followed by Germany with 3.5 percent and Colombia with 1.5 percent. “It would be really difficult to regain the export and production levels of the previous year before 2020 is out,” Cuevas said, despite the improving results.

Sales have fallen 21.9 percent in the US (from 9.79 million to 7.66 million units sold), 30.2 percent in Canada (from 1.15 million to 808,866 units sold) and 31.8 percent in Mexico (from 746,598 to 509,318 units) between January July 2020. In the US, year-on-year sales fell 15.9 percent in July. Vehicles produced in Mexico represented 17.6 percent of the total vehicle sold in the US in that same month. Regarding accumulated figures, in 2020 Mexican vehicles represented 13.6 percent of the total US sales. “Even though it has been a fall, it is not as great as we would have expected,” Cuevas said. AMIA’s forecast is for 2020 production to fall between 27 and 30 percent.

Auto Parts

In terms of auto part manufacturing, Oscar Albin, Executive President of INA, forecasts that total sales by the end of 2020 will be around US$75 billion, which compared to 2019 is a fall of 23 percent. “As vehicle manufacturing volumes ramp up, they will have a spillover effect in the auto part sector. However, a new lockdown and operations suspension could affect greatly this forecast. Our priority in North America is to keep our facilities contagion-free,” he said.

For INA, the target is not to get back to pre-pandemic levels but to surpass production levels seen in 2018, which according to Albin was the best year for vehicle production in North America. “In two years, we could reach that goal,” he said. 

Vehicle Sales

According to AMDA, July vehicle sales saw a negative performance of 31.3 percent compared to July 2019. The subcompact segment, where the entry-level models for most brands compete, saw sales decrease by 42 percent. AMDA reports a 31.8 percent reduction in accumulated sales compared to the first seven months of 2019: 237,280 units less. "Subcompact vehicles sales performance is relevant as this segment is one that contributes the most to vehicle sales with 31.5 percent of the market,” said Guillermo Rosales, Director General of AMDA.

AMDA also reports a month-on-month 16 percent recovery in July compared to June. “Our forecasts toward the end of the year have been adjusted following a better performance seen during June and July. Behind this positive result is the fact that dealerships are now open. However, restrictions are still in place in Veracruz, Campeche, Colima and Puebla,” he said. AMDA expects to close 2020 with 964,400 units sold, a 26.8 percent reduction compared to 2019. 

Rosales also mentioned that there is a trend among consumers who prefer private over public transportation to reduce the risk of contagion. “According to different studies conducted in Mexico and other countries, this trend exists. However, we cannot determine exactly the degree of its relevance to overall sales performance,” he said.